Setting Your Surcharge: Highest and Lowest ATM Fees

Like everything else, ATM fees are increasing every year. So, if you are just getting started in the ATM business, you might be wondering what a fair, competitive surcharge fee is. If you’ve already been in business for a while, you might want to know if your rates are still optimal. 

Here, we offer a number of tips and considerations when it comes to setting ATM fees for your ATM machines. You might also be interested in which cities have the highest and lowest ATM fees. If you live in or near these cities, it could help you determine the right surcharge for your specific area. Keep reading to find out how to set the right surcharge for your machines.

General Tips for Setting ATM Fees

Setting an appropriate surcharge fee for an independently owned ATM involves a mix of market research, customer psychology, and profitability analysis. Here are some best practices:

Understand the Market

The first step is understanding your market. The right surcharge fee might depend on where your machine is located. For example, high-traffic areas like airports, bars, clubs, or tourist attractions might allow for higher surcharge fees as customers prioritize convenience over cost.

You also want to analyze nearby competition. If your fee is significantly higher than other ATMs nearby, customers might avoid using your machine in favor of a cheaper one. 

Consider Customer Psychology

Psychology plays a role, too. A standard, familiar, round rate can keep customers from scrutinizing the cost. Most customers are willing to pay between $2.50 and $3.50 in areas where there are many ATM/bank options. 

The condition of your machine also adds to perceived value. Clean, well-maintained, safe machines can justify slightly higher fees. New equipment (shiny), extra features (lighted keyboard), and added benefits (coupons) add to this perceived value as well. If your machine fits one or more of these categories, it could justify a higher surcharge fee.

Conduct Profit Analysis

Third, you want to weigh profit and usage. For example, lower ATM fees might attract more users therefore increasing your overall revenue despite the lower surcharge. On the other hand, higher fees can work if there is little competition. The less ATM options users have, the more convenient your machine becomes and customers have no choice but to pay the ATM fees you set.

Be Transparent

Another ATM surcharge fee best practice is to be transparent. Display your surcharge fee clearly on the screen before customers complete their transaction. A clear, upfront disclosure can prevent negative reactions and encourage repeat customers.

On-screen disclosure is mandatory under the Electronic Fund Transfer Act (EFTA) & Regulation E. It specifies that ATM operators must provide a clear and conspicuous disclosure of any surcharge fees before the transaction is processed. Users must also be given the option to cancel the transaction if they do not wish to accept the fee.

Before a transaction is finalized, the ATM must display the exact surcharge amount being charged. There should be a message stating that the fee is in addition to any fees from the customer’s bank. Finally, there needs to be a Yes/No prompt to allow users to accept or decline the fee.

Different ATM networks (Visa, Mastercard, Pulse, etc.) may impose additional rules, including. If you connect to a specific network, it’s best to check their fee disclosure policies. Your processing company can help with this.

Act on Insights

Finally, it’s important to remember to monitor your transaction volume regularly. Find out what works and what doesn’t work to get to that sweet spot that balances customer satisfaction with profitability. 

Then, continue to monitor as the market changes. Fees might increase from year to year, or competing machines can crop up forcing you to adjust your surcharge fee again. You can, and should, adjust your ATM fees based on the patterns you observe.

Understanding ATM Fees: Flat Fees vs. Percentage-Based Fees

There are a couple of ATM fee structures you can implement: flat fees and percentage-based fees. The difference between flat fees and percentage-based fees for ATM surcharge fees lies in how the fee is calculated and how it affects customer transactions.

Flat Fees

A flat fee is a fixed amount charged per transaction, regardless of the withdrawal amount. For example, a $3.00 surcharge applies whether the customer withdraws $20 or $500.

The advantages of a flat fee structure are predictability, simplicity, and fairness. Customers know exactly how much they’re paying, it’s easier to set up and manage in the ATM system, and customers aren’t penalized for withdrawing larger amounts. 

Paying a $3.00 surcharge on a $500 withdrawal seems a lot more reasonable than for a $20 withdrawal. So, this can make your machine more appealing for those withdrawing large amounts. However, it can also deter those making smaller withdrawals. Plus, you stand to make less for more work. The more cash that’s dispensed, the more frequently you have to restock the machine. This can create more work while earning less.

You can ask your processing company about setting up tiered flat fees as well. Keep in mind, though, that this is only an option for Genmega machines on only one processing platform.

Percentage-Based Fees

A percentage-based fee is a fee calculated as a percentage of the withdrawal amount. For example, a 2% surcharge means that a $100 withdrawal incurs a $2 fee, while withdrawing $500 incurs a $10 fee.

This structure allows you to make more on higher withdrawals while offering flexibility which some customers will perceive as more reasonable. However, percentage-based fees are more complex and can be harder to explain to customers. The higher fees can discourage those withdrawing large amounts (they’ll seek a flat fee ATM machine). And some jurisdictions may regulate percentage-based fees more strictly than flat fees.

Which to Choose?

So, while a flat fee is generally preferred in the U.S. and most other regions because it’s simpler and more widely accepted by customers, a percentage-based fee might be suitable in high-value or niche markets.

If you’re targeting average customers and aiming for high transaction volume, flat fees are usually the safer choice. However, if your location attracts customers making large withdrawals, a percentage-based fee could maximize your profits.

Combining Flat Fees and Percentage-Based Fees

Now, you can also combine these two fee structures. A hybrid fee structure involves charging a base flat fee plus a percentage of the withdrawal amount and creates a tiered approach to surcharges. What this looks like is if, say, a customer withdraws $100, they would be charged either a fixed, flat fee amount ($2.00) or a percentage of the transaction (e.g., 3%), whichever is greater. In this case, the withdrawal fee for $100 would be $3.00.

This hybrid structure increases your revenue potential by earning more on larger transactions while still making a profit on smaller ones. It is also perceived by customers as fair as the fee scales with the transaction size rather than penalizing low or high withdrawals disproportionately. This also allows you to cater to a wider range of customers, both those seeking low withdrawal amounts and those seeking high withdrawal amounts.

However, customers may find the pricing harder to understand and seek a flat fee ATM for simplicity’s sake. It could also deter those needing large withdrawals. Again, high surcharge amounts for large withdrawals (e.g., $5+ on a $300 transaction) might cause some to seek a cheaper, $3.00 flat fee.

A combined, hybrid fee structure works well in a few specific location types. In premium or niche locations like airports, casinos, or upscale venues, customers are less price-sensitive. And if your ATM is located in a place where large transactions are common, the higher ATM fees are easier to justify.

Best practices for combined ATM fees are to set a reasonable rate and offer transparent disclosure. Clearly display the surcharge breakdown on the ATM screen before the transaction so customers can make an informed choice.

Fast Cash Psychology

You can maximize profits by using “fast cash” amount psychology, too. Flat rate fast cash amounts ($60, $80, $100) on the left buttons can attract the flat rate, lower withdrawal users. Then, setting greater fast cash amounts ($300, $400, $600) on the right buttons can maximize profits from percentage rate, higher withdrawal users. 

For this to work, you need to make sure you choose the right percentage. If the percentage fee is too high (e.g., 3%), customers making large withdrawals may abandon the ATM. If the percentage is too low (e.g., 0.5%), you miss out on revenue potential.

By applying flat fees to small fast cash amounts, you encourage frequent transactions. Reserving percentage fees for larger amounts maximizes revenue. This allows you to optimize profits without discouraging usage.

Highest and Lowest ATM Fees

When it comes to setting a flat fee, how do you determine the amount? There are a lot of factors to consider. 

National Averages

The average ATM surcharge fee across the U.S. typically falls between $3.00 and $3.50. According to Bankrate’s 2024 checking account and ATM fee study, the average surcharge reached a record high of $3.19. 

Of the 25 metro areas Bankrate surveyed, the three cities with the highest average ATM fees are Atlanta ($5.33), Phoenix ($5.22), and San Diego ($5.22). The lowest fees were reported in Boston ($4.16), Seattle ($4.34), and Philadelphia ($4.42).

However, smaller operators in competitive areas often charge closer to $2.50 to $3.00 to remain competitive. You’ll find higher surcharges in urban areas, often $3.50 or more, due to convenience and limited cash access. Rural areas typically have lower surcharges, ranging from $2.00 to $3.00.

Factors that Influence ATM Fees

Other factors besides competition and geographic location that influence flat fee surcharge rates include transaction volume, customer profile, operating costs, and convenience.

High-traffic locations may support higher fees without reducing usage, while low-traffic locations benefit from a lower fee to encourage transactions. In areas frequented by cost-conscious customers, such as near universities, keeping the fee closer to $2.00–$2.50 may maximize usage. If your ATM’s costs are low (e.g., rent, cash loading, maintenance), a lower fee like $2.50 might still provide a good profit margin.

ATMs in convenient or exclusive locations can justify higher surcharges since customers are willing to pay more for easy access to cash. For example, fees can go as high as $4.00 to $7.00 in locations like airports, casinos, and stadiums due to captive audiences and high convenience factors. And ATMs in bars and nightclubs are often set around $3.00 to $4.00, as people prioritize convenience over cost.

Conclusion

There is a lot to consider when it comes to setting your ATM fees. The decision will really come down to where you are located geographically, what kinds of locations your machines are in, and who your customers are and what they need. 

At the end of the day, you are the expert on determining your surcharge structure. Monitoring activity and trends on your machine as you test ATM fees will provide you with all of the insights you need.

Your ATM processing company can answer any questions you might still have. Contact us at ATMDepot.com and get started today!